Gujarat High Court
M/S Baccarose Perfumes And Beauty ... vs Central Bureau Of Investigation on 15 September, 2023
NEUTRAL CITATION
R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL REVISION APPLICATION NO. 783 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR Sd/-
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1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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M/S BACCAROSE PERFUMES AND BEAUTY PRODUCTS PRIVATE LIMITED
Versus
CENTRAL BUREAU OF INVESTIGATION & 1 other(s)
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Appearance:
MR MIHIR JOSHI, SR. ADVOCATE with MR RAHEEL PATEL, MR AALAY
SHAH and MR JINANSH SHAH for GANDHI LAW ASSOCIATES(12275) for
the Applicant(s) No. 1
MR RC KODEKAR(1395) for the Respondent(s) No. 1
MR LB DABHI, ADDL.PUBLIC PROSECUTOR for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
Date : 15/09/2023
CAV JUDGMENT
[1.0] Present Criminal Revision Application under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "CrPC") has been preferred by the applicant herein - M/s. Baccarose Perfumes and Beauty Products Private Limited through its Director and Authorised Page 1 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined Signatory Nishant Kapurchandra Upadhyay seeking following prayers:
"(A) Your Lordships may be pleased to quash and set aside the impugned order dated 19.07.2017 passed by the learned Special Judge (CBI), Ahmedabad in CBI Special Case No.48 of 2010 and consequently, discharge the petitioner from the said proceedings;
(B) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to stay further proceedings in respect of the trial pending before Court of the learned Special Judge (CBI), Ahmedabad in CBI Special Case No.48 of 2010;
(C) An ex-parte ad interim relief in terms of prayer (B) above may kindly be granted;"
[2.0] The brief facts of the case are as under:
[2.1] A regular case No.RC-6(A)/2005-GNR under Section 120-B read with Section 420 of the Indian Penal Code, 1860 (hereinafter referred to as "IPC") and Sections 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1998 was registered at CBI, Gandhinagar Branch on 04.04.2005 on the basis of source information alleging therein that Shri Yogendra Garg, Joint Development Commissioner, Kandla Special Economic Zone, Kandla, Shri V.N. Jahagirdar, Deputy Commissioner of Customs, Kandla Special Economic Zone (KASEZ) and M/s. Baccarose Perfumes and Beauty Products Private Limited, KASEZ had entered into criminal conspiracy, during the period March, 2001 to August, 2004, to cause wrongful gain to themselves and Page 2 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined corresponding wrongful loss to the Government. That in pursuance to the said criminal conspiracy and by abusing their official position they allowed M/s. Baccarose Perfumes and Beauty Products Private Limited to clear its goods into the Indian Market on payment of Countervailing Duty on Invoice value instead of Maximum Retail Price (MRP / RSP) thereby causing huge loss to the Government.
[2.2] After the investigation, Investigating Officer has been pleased to file the closure report before the learned Special Judge, CBI Court No.3, Ahmedabad. The learned Special Judge has been pleased to reject the closure report submitted by the Investigating Officer and subsequently directed to register the Special Case against the accused persons which subsequently came to be registered as Special Case No.48 of 2010 vide order dated 01.06.2010. The said order came to be challenged by the present applicant by way of Special Criminal Application No.1214 of 2010, which came to be dismissed by the coordinate Bench.
[2.3] Being aggrieved and dissatisfied with the said order, present applicant approached the Hon'ble Supreme Court by way of filing Special Leave Petition (Cri.) No.14430 of 2013 wherein the Hon'ble Apex Court has been pleased to pass the following order.
"Heard learned senior counsel appearing for the petitioner.
Delay condoned.
We are not inclined to interfere at this stage when the Page 3 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined Special Judge has only taken cognizance and directed issue of summons to the petitioner. However, it will be open for the petitioner to raise appropriate pleas for discharge at the time of hearing of charges.
The special leave petition dismissed."
In view of the above order passed by the Hon'ble Supreme Court, present applicant preferred application Exh.57 before the learned Special Judge, CBI Court to discharge him, which application came to be dismissed by the learned Special Judge vide order dated 19.07.2017.
Hence, present criminal revision application.
[3.0] Learned Senior Counsel Mr. Mihir Joshi appearing with learned advocates Mr. Raheel Patel, Mr. Aalay Shah and Jinansh Shah for Gandhi Law Associates for the applicant has submitted that, the learned Special Judge has committed an error in rejecting the discharge application of the present applicant. At the outset, learned Senior Counsel has submitted that as the Hon'ble Apex Court has given liberty to file discharge application, applicant had filed application Exh.57 seeking discharge and requested the learned Special Judge to consider the case of the applicant as no any offence under Sections 420 and 120(B) of the IPC would be attracted against the present applicant. Present applicant is not in connivance with any of the government officials and applicant Company has not hatched any conspiracy. The alleged dispute is only qua interpretation of the Rules and there is error in the impugned order and there was debatable Page 4 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined issue qua attracting provisions of (1) Standards of Weights and Measures Act, 1976; (2) Standards of Weights and Measures (Packaged Commodities) Rules, 1977; (3) Central Excise Act, 1944 and (4) The Customs Act, 1962. There is no dispute that the amount of duty or any shortfall has already been paid by the applicant Company and the department has accepted the same. In support of the same, learned Senior Counsel has drawn the attention of this Court to the rejoinder filed by respondent No.1 and argued that, it is an admitted fact that, as per the order of the Central Board of Excise and Customs, after the interpretation of circular dated 28.02.2002 and letter dated 04.01.2006 issued by SWM, wherein, it is held that the package as cleared by the applicant Company did not require any declaration of MRP as they were wholesale packages and not retail packages as the applicant Company is not indulged in any retail business and is doing the wholesale business. Hence, provision of Standards of Weights and Measures Act, 1976 would not apply in respect of the commodities contained in the package of less than (i) 20 mg or (ii) 20 ml and commodities containing alcohol and so CVD was not required to be paid on MRP basis of such commodities and the said fact is also accepted by the revenue authorities and ultimately the said proceedings came to be culminated in favor of the applicant Company and thus, it is crystal clear that there is no any malafide intention on the part of the applicant Company. There was only question of interpretation of provisions of Rules and Circulars and subsequently the issue is settled by the Settlement Commissioner vide an order dated 20.08.2007 and Page 5 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined Department of Legal Meterology has also opined that the packages cleared by the applicant Company did not require any declaration and the said packages are wholesale packages and not retail packages as clarified vide letter dated 04.01.2006. Further, he submitted countervailing duty was arrived at the conclusion that there is a deficit duty of Rs.1,36,95,984/- but the applicant Company had paid the revenue of Rs.1,51,45,378/-. Hence, he has requested to allow the present application in absence of any iota of evidence of malafide act or any element of cheating on the part of the applicant Company. Even, the department and CVC has also not accorded any sanction for prosecution against the officers also and hence, he requested to discharge the accused.
[4.0] Per contra, learned advocate Mr. R.C. Kodekar appearing for respondent No.1 has vehemently opposed the present application and stated that earlier closure report was filed but the Court has not accepted the same and for that valid reasons are assigned. Not only that, this Court has also confirmed the said order. Now, merely because the Hon'ble Supreme Court has given the liberty to file the application for discharge does not mean that the present application is required to be allowed. There is sufficient evidence collected during the investigation and at the intelligence, the raid was conducted and it was found that in furtherance of criminal conspiracy with the officials of the Customs Department, present applicant Company has committed an offence and countervailing duty (CVD) on the assessable Invoice value instead of Maximum Retail Price. The Company has Page 6 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined evaded more than 8 Crores of CVD and caused loss to the government exchequer. Prima facie material indicating commission of offence is available on record and at the time of framing of charge, Court should not weigh the evidence and merely it has to see that is there any sufficient material available against the accused to proceed or not. Even, after lodging of the complaint, with a view to get filed the closure report, the applicant approached the Commissioner of Customs and then differential amount of CVD being deposited but prior to that case was registered and only with a view to get rid off from the criminal proceedings, approached the appellate Authority by suppressing facts and hence, all these exercise on the part of accused Company are nothing but an afterthought which amounts to a defence and for that full-fledged trial is required. Hence, he has requested to dismiss the present application.
[5.0] Heard learned Counsel appearing for the respective parties.
[5.1] Under Section 227 of the CrPC, after considering the entire material placed on record and after hearing the arguments of the accused as well as the prosecution, if the Court reaches to the conclusion that there is no sufficient ground for proceeding against the accused and that the commencement of trial will only waste the valuable time of the Court, the Court may discharge the accused.
The Hon'ble Supreme Court in the case of P. Vijayan vs. State of Kerala [(2010) 2 SCC 135] observed and held that at the time of framing of charge, Court has to consider the Page 7 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined following aspects.
(i) The Judge while considering the question of framing the charges under Section 227 of the Cr.P.C. has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out. The test to determine prima facie case would depend upon the facts of each case.
(ii) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained, the Court will be fully justified in framing a charge and proceeding with the trial.
(iii) The Court cannot act merely as a Post Office or a mouthpiece of the prosecution but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities etc. However, at this stage, there cannot be a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.
(iv) If on the basis of the material on record, the Court could form an opinion that the accused might have committed offence, it can frame the charge, though for conviction the conclusion is required to be proved beyond reasonable doubt that the accused has committed the offence.Page 8 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023
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(v) At the time of framing of the charges, the probative value of the material on record cannot be gone into but before framing a charge the Court must apply its judicial mind on the material placed on record and must be satisfied that the commission of offence by the accused was possible.
(vi) At the stage of Sections 227 and 228 of the CrPC, the Court is required to evaluate the material and documents on record with a view to find out if the facts emerging therefrom taken at their face value discloses the existence of all the ingredients constituting the alleged offence. For this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case.
(vii) If two views are possible and one of them gives rise to suspicion only, as distinguished from grave suspicion, the trial Judge will be empowered to discharge the accused and at this stage, he is not to see whether the trial will end in conviction or acquittal.
(viii) If the evidence, which the prosecutor proposes to adduce to prove the guilt of the accused, even if fully accepted before it is challenged in cross - examination or rebutted by the defence evidence, if any, 'cannot Page 9 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined show that the accused committed offence, then, there will be no sufficient ground for proceeding with the trial.
(ix) It is open to the accused to explain away the materials giving rise to the grave suspicion.
(x) There must exist some materials for entertaining the strong suspicion which can form the basis for drawing up a charge and refusing to discharge the accused.
[5.2] The above parameters which govern the exercise of jurisdiction have found expression in several decisions of the Hon'ble Supreme Court. The Hon'ble Supreme Court in the case of The State of Rajasthan vs. Ashok Kashyap reported in (2021)11 SCC 191 and State of Karnataka vs. M.R. Hiremath [(2019)7 SCC 515] has observed that at the stage of considering an application for discharge, the Court must proceed on the assumption that the material which has been brought on record by the prosecution should be true and the Court should evaluate the material in order to determine whether the facts emerging from the material, taken on its face value discloses the existence of the ingredients necessary to constitute the offence. It is also observed that at the stage of discharge, the probative value of the materials has to be gone into and the Court is not expected to go deep into the matter. Whereas what is needed to be considered is whether there is a ground for convicting the accused has been made out. To put it differently, if the Court thinks that the accused might have committed the offence on Page 10 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined the basis of the materials on record on its probative value, it can frame the charge but for the conviction of the accused the Court should come to the conclusion that the accused has committed the offence. Hon'ble Apex Court further observed in this case that the law does not permit a mini trial at the stage of discharge. The scope of discharge is very limited. At the stage of framing of charge, the prosecution merely needs to display a prima facie case qua the accused from the material available on record and trial may thereafter commence.
[5.3] However, at the stage of deciding a discharge application, the accused may opt to refer to and rely upon sterling quality evidence to seek his discharge, and if, on the basis of such unimpeachable record, the Judge is satisfied on the aforesaid legal precepts that the accused is entitled to an absolute exoneration from the alleged crime, it is well within the law for the accused to be discharged the settled position of law is that the Judge while considering the question of framing the charges under the said section has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out and whether the materials placed before the Court discloses grave suspicion against the accused which has not been properly explained to the Court, then in such a case the Court will be fully justified in framing the charge and proceed with the trial. On other hand, if the Judge is satisfied that the evidence produced before the Court gives rise to some suspicion but not Page 11 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined grave suspicion then the Judge will be fully justified in discharging the accused.
[6.0] In the complaint it was alleged that Shri Yogendra Garg, the then Joint Development Commissioner, Kandla Economic Zone, Gandhidham and Shri V.N. Jahagirdhar, the then Deputy Commissioner, Kandla Special Economic Zone (KASEZ), Gandhidham entered into criminal conspiracy during the period from March, 2001 to August, 2004 with present applicant namely M/s. Baccarose Perfumes and Beauty Products Pvt. Ltd. In pursuance of said criminal conspiracy M/s. Baccarose Perfumes and Beauty Products Pvt. Ltd. was allowed to remove the goods from KASEZ to Domestic Tariff Area on payment of the Counter Vailing Duty (CVD) on the assessable value declared in the invoice instead of Maximum Retail Price (MRP), which resulted in undue pecuniary advantage to the accused persons to the tune of Rs.8 Crores and corresponding loss to the Government.
[6.1] Going through the complaint and material collected by the Investigating Officer during the investigation, while taking cognizance and issuing the process against the accused, the learned Special Judge, CBI Court has come to conclusion as under:
"8. Now, having regard to the evidence collected by the investigating officer, more particularly the statements of the offices, who were working at the KASEZ at the relevant time, it appears that on the basis of the intelligence submitted by one Shri S.Kishor, the then Preventive Officer, KASEZ, the detection of evasion of CVD at the instance of the accused - Company in connivance of the accused - officers of the KASEZ, had surfaced. It also Page 12 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined appears that the said Preventive Officer Shri S.Kishor with the assistance of another Preventive Officer Shri R.V. Redy, collected the prima facie material about the existence of evasion of CVD, and brought to the notice of their higher up i.e. Shri Garg and Shri Jahangirdhar, for taking necessary action against the accused - Company, however the said accused - officers kept on sending the files back and forth, raising queries under one guise or the other. It clearly appears from the statements of witnesses that the matter was made abundantly clear to them that for computing the CVD in respect of the imported goods cleared in the DTA, the MRP based assessment was to be adopted in view of the amendment in Section 3 of the Customs Tariff Act 1975 amended vide Section 116 of the Finance Act 2001 and the subsequent notifications i.e. Central Excise Non- Tariff Notifications dated 01/03/2001 making applicable Section 3 of the Customs Tariff Act and also other relevant notifications. It further appears that despite the said notifications having come into force from 01/03/2001, the accused - Company did not declare MRP on its product meant for clearance in DTA and pay CVD on the basis of MRP, and the accused officers instead of taking action against the accused - Company, though suggested by the Preventive Officers, kept on raising the queries on the file and delayed in taking the decision for more than three years. It also further appears that Shri Ravi Kumar, the then Superintendent of Customs (P&I), had also confirmed to Shri Garg that at the MPEZ, Chennai, the assessments were being made as per the MRP declarations by the concerned units, and that it was made clear by him that the MRP assessment was to be carried out for the DTA clearance not only as per the provisions of law, but also from the practice that was being adopted at other Special Economic Zones. However, thereafter also, the accused
- officers did not take any action against the accused - Company and allowed the Company to pay CVD on the invoice value instead of MRP of the products. It further appears that as per the intelligence collected by the Preventive Officers, there was a substantial difference between the invoice value and the MRP, and for certain products, the difference was upto 85%. It further appears that the said evasion of CVD payable of MRP of Page 13 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined the products continued since March 2001 to July 2004 with the active connivance of the accused - officers, which caused loss of revenue to the extent of crores of rupees, and ultimately, in 2005, the accused - Company was assessed as per the MRP value of its products. It is pertinent to note that the differential amount had been paid by the accused - Company only when the Customs department carried out raid on the unit."
[6.2] Thus, prima facie, it appears that the learned Special Judge come to the conclusion that though notifications issued by the Central Excise Non-Tariff dated 01.03.2001 making applicable under Section 3 of the Customs Tariff Act and other relevant notifications, despite the said notifications having come into force since 01.03.2001, the accused Company did not declare MRP on its product meant for clearance in DTA and pay CVD on the basis of MRP, and the accused officers instead of taking action against the accused - Company though suggested by the Preventive Officers, kept on raising the queries on the file and delayed the decision for more than three years and then the learned Special Judge has also noted the conduct on the part of officials though intelligence submitted by one Shri S. Kishore, the then Preventive Officer, KASEZ, the deduction of evasion of CVD at the instance of the accused Company in connivance of the accused Officers of KASEZ had surfaced. It also observe that Preventive Officer Mr. S. Kishore with the assistance of other Preventive Officer Mr. R.V. Reddy collected prima facie material about the existence of the evasion of CVD and brought to the notice of higher-ups who are erring officials arraigned as accused. However, they have raised the clearance under one guise or Page 14 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined another and they have cleared the imported goods in the DTA. Further, it appears that as per the intelligence received by the Preventive Officers, there was a substantial difference between the invoice value and MRP and for certain products the difference was upto 85%. It further appears that the said evasion of CVD payable on MRP of products continued since March, 2001 to July, 2004 with the active connivance of the active officers which caused loss of revenue to the extent of crores of rupees and ultimately in 2005 the accused Company was assessed as per the MRP value of its product and the said amount paid by accused Company only when the Customs Department carried out raid on the unit. Considering the aforesaid material, prima facie, it appears that from inception there was intention of cheating on the part of the accused Company and in connivance of officials of Special Economic Zones, the offence is committed.
[7.0] In view of the above, prosecution must have to show the following facts emerging from the record so as to establish the offence of cheating under Section 420 of the IPC
1. The claim made by the applicant Company was false;
2. The accused Company was aware that the claim made was false and untrue;
3. In an effort to mislead the department / government, the accused made false statements with malice and was an afterthought;
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4. The act in which the accused Company persuaded the department to carry out or refrain from acting in a way that the officials from the department would not have done or would have otherwise committed;
5. There was a mens rea, which is a legal term that denotes a person's mental condition or state when committing a crime and is the motive behind every crime. It is a specific anticipated or pre-planned intention to conduct a specific act, herein which is wrongful gain to the applicant Company and caused loss to the government.
Thus, one of the most important ingredients needed to establish the offence of cheating under Section 420 of the IPC is the making of a false representation. It is not enough to show that a false representation was made to establish a case under Section 420 of IPC for cheating but, it must be shown that the accused knew since inception the representation to be false and that it was made with the intent to deceive.
[7.1] In view of above, it reveals from the record that since inception there was malafide and dishonest intention on the part of the accused Company in connivance with officials of the department for evading countervailing duty and for getting wrongful gain. It is the case of the prosecution that in connivance with the officers of Customs Department, by hatching the criminal conspiracy, the applicant Company - M/s. Baccarose Perfumes and Beauty Products Private Limited was allowed to remove the goods from KASEZ to Domestic Tariff Area on the Page 16 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined payment of CVD on the assessable value declared in the invoice instead of MRP. Though the practice was prevailing even in MPEZ, Chennai, where the assessments were being made as per the MRP declarations by the concerned units and the department has constantly drawn attention to the officers of KASEZ though they did not pay any heed and refrained from taking any action as per the Policy and Rules. Ultimately, the loss was caused to the government exchequer and in this regard, complaint is filed and erring officers are also arraigned as accused. Merely because CVC has not accorded sanction is not a ground to discharge the present accused. As one accused has retired from service hence, question of prosecuting the retired employee - accused does not arise. Herein, present accused is facing charge for the offence punishable under Sections 420 and 120(B) of the IPC.
[8.0] Further, it is pertinent to note that, to establish criminal conspiracy charges under section 120 of the IPC, there must be an agreement, either expressed or implied. And for that, no proof of direct meeting or communication is needed. There must be active cooperation. In other words, joint evil intent is mandatory. When any act is done even though it is lawful but done by illegal means, it constitutes criminal conspiracy.
[8.1] The first ingredient of criminal conspiracy is agreement between two or more persons. This agreement is the crux of the offence and can be explicit or implicit, written or oral. The second essential component is the intention to commit an illegal act or a legal act by illegal means. The intent should directly related to Page 17 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined the outcome that the conspirators plan to achieve.
[8.2] The essential ingredients of criminal conspiracy are: (i) An agreement between two or more persons; (ii) The agreement must be related to doing or causing to be done either (a) an illegal act and (b) an act that is not illegal in itself but is done by illegal means; (iii) The agreement may be expressed or implied or partly expressed and partly implied; (iv) As soon as the agreement is made, the conspiracy arises, and the offence is committed and (v) the same offence is continued to be committed so long as the combination persists.
[8.3] It is needless to say that so far as the allegation of conspiracy is concerned, it is very difficult to collect any direct evidence of conspiracy. From the material collected or the evidence adduced on record, inference of conspiracy is required to be drawn. The Investigating Officer has collected voluminous documentary evidences and evidence of the Intelligence Officers, the offence of evasion of CVD of 85% payable to the government on MRP of the products is noted. Merely because, subsequently in appeal the Customs Department has cleared the doubts and Company has subsequently paid the differential amount of CVD of Rs.1,51,45,378/- is not a ground to exonerate the applicant Company from the charges leveled against it as said proceedings are afterthought and amount paid after the raid conducted by the Customs Department. The said proceedings are initiated after closing of the present prosecution. Nonetheless, in the judgment rendered by this Court in Special Criminal Application Page 18 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined No.1214 of 2010, against cognizance / issue of summons, it is clearly observed that considering the wordings of section 32-K of the Central Excise Act, no such immunity shall be granted by the Settlement Commissioner in the case where proceedings for prosecution of any such offence have been initiated. Before the date of receipt of the application under Section 32-K of the Central Excise Act, already prosecution came to be instituted. Hence, no such immunity can be granted and said act is nothing but afterthought i.e. not prior to complaint and said fact is also not disclosed before the authority hence, question of bonafide intention and debatable question of interpretation of Rules also does not arise considering peculiar facts of the case.
[8.4] Even, the act on the part of the accused prima facie appears to be false. Section 23 of the IPC defines "Wrongful gain", which provides that "wrongful gain" is gain by unlawful means of property to which the person gaining is not legally entitled and due to such act, wrongful loss is caused to the government for which government is legally entitled to recover dues. Thus, as per section 24 of the IPC, whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing "dishonestly". Herein, only with intention of getting unlawful gain to company and to cause loss to government exchequer, act is committed.
[9.0] Learned Senior Counsel for the applicant has submitted that, herein, pure question of interpretation of law is involved Page 19 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined and there was only misconception on the part of the authority as well as on the part of applicant after getting clarification from the concerned department, applicant has paid the duty as per the order of the appellate authority. It is pertinent to note that as per the Circular No.625/16/2002-CX dated 28.02.2002, it was clarified that in case of dispute between the department and assessee regarding valuation of goods under Section 4A of the Central Excise Act, 1944 and Standards of Weights & Measures Act, 1976, a clarification may be obtained from the Meterology Department of the State Government. Though the dispute arose since 2001 to 2004, no such clarification was sought for within time or at relevant point of time. Nonetheless, appeal is preferred subsequently in the year 2005 that too by suppressing the fact that the criminal prosecution is pending or complaint is filed before the Settlement Commissioner as per the mandatory provision of section 32-K of the Central Excise Act, 1944, which reads as under:
"32K. Power of Settlement Commission to grant immunity from prosecution and penalty.-- The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 32-E has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his duty liability, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act [and also either wholly or in part from the imposition of any penalty and fine] under this Act, with respect to the case covered by the settlement:Page 20 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023
NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 32-E."
In view of above, question of settlement or subsequent order of settlement after initiation of prosecution against company becomes irrelevant.
[9.1] Now, so far as question of interpretation is concerned, even the appellate authority has come to the conclusion that the CVD in the invoice instead of Maximum Retail Price (MRP) is required to be paid. In appeal also, it is concluded that the CVD is required to be paid on MRP but not on MRP basis on the product containing alcohol. It was further ordered that CVD is also not to be paid on the basis for the product whose weight / measurement is less than 20 ml alcohol. As per the say of department and the authority, each and every package of wholesale carton ultimately sold to consumer in the retail and should have all the mandatory declaration as per Rule 6 of the Packaged Commodities Rules, 1977.
Based on the aforesaid fact, prosecution came to be lodged and ingredients of offence are prima facie made out as discussed in para 8.1 of the earlier part of this order.
[10.0] In view of above, whether the defence raised by the present applicant is bonafide or not, all these aspects are Page 21 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined required to be considered at the time of full-fledged trial as the learned Special Judge is satisfied that prima facie case is made out and there is sufficient material and evidence and ground for framing of charge and the Court has not gone into the merits of the case and considered on the basis of material on record that the accused is likely to be convicted or not. Hence, the order passed by the learned Special Judge does not call for any interference as at the time of framing of the charge, Court has not to weigh evidence and come to conclusion as to whether or not there is a possibility of recording conviction. Court has to only see as to whether there is sufficient ground or material against the accused based on which accused may be put to trial.
[11.0] In view of the law laid down by the Hon'ble Apex Court in the case of P. Vijayan (Supra), Ashok Kashyap (Supra) and M.R. Hiremath (Supra), and in view of the fact that on the basis of all the material on record, the learned Special Judge has satisfactorily come to conclusion that accused Company might have committed an offence so no any suspicion qua interpretation of Rules or provisions arise at this stage.
[12.0] Hence, present criminal revision application stands dismissed. Resultantly, the impugned order dated dated 19.07.2017 passed by the learned Special Judge (CBI), Ahmedabad in CBI Special Case No.48 of 2010 is hereby confirmed. As the offence is registered way back in the year 2005, learned Special Judge, CBI Court, Ahmedabad is directed to Page 22 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023 NEUTRAL CITATION R/CR.RA/783/2017 CAV JUDGMENT DATED: 15/09/2023 undefined expedite the trial preferably within a period of one year. Rule is hereby discharged.
Sd/-
(HASMUKH D. SUTHAR, J.) FURTHER ORDER After the pronouncement of judgment, learned Advocate appearing for the applicant has requested to extend the interim relief granted earlier vide order dated 18.08.2017 by the coordinate Bench for a further period of three weeks to enable the applicant to approach the Hon'ble Supreme Court.
Considering the fact that interim relief granted to the applicant has been extended from time to time, this Court deems it fit to extend the interim relief granted earlier for a further period of 15 days from today.
Sd/-
(HASMUKH D. SUTHAR, J.) Ajay Page 23 of 23 Downloaded on : Sat Sep 16 17:21:58 IST 2023